The Centre has stalled a $1.3-billion (or bid by Shanghai Fosun Pharmaceutical Group (SFP) to get an 86% stake+ in Hyderabad-based Gland Pharma, citing “genuine concerns” over proprietary technologies developed by the Indian firm moving over to some Chinese pharma major.
Top government officials on Monday dismissed media reports that the decision was linked to the current border standoff between both countries. Sources say Gland Pharma has a lead in injectables, an area where Chinese companies lag Indian pharma companies. Gland Pharma says it is a world leader in the Glycosaminoglycans range of molecules and has pioneered engineering in India.
This past year, Chinese billionaire Guo Guangchang, who runs a diversified conglomerate under the banner of Fosun International, struck the billion-plus-dollar deal to buy Gland Pharma after the government’s decision to allow 74% overseas investment in pharma production through the automatic route.
After emptying FIPB, the proposed acquisition needed the nod of the Cabinet Committee on Economic Affairs. Besides being the largest Chinese acquisition in India, the deal would have also seen one of that country’s wealthiest persons investing in the Indian production story, providing heft to Prime Minister Narendra Modi’s ‘Make in India’ initiative.
KKR, an American private equity firm and promoter Ravi Penmetsa’s household, own over 95% stake in the organization. They had appointed Co & Jefferies to find a buyer. The bidding procedure had attracted interest from US-based Baxter and buyout investor Advent International, among others. Gland Pharma said it had no information regarding the decision of the government.
“We’ve not heard anything about it (rejection). Its clearance was given by the FIPB in March. Thereafter we’ve been following up, but we don’t know anything further than that. We did not expect any hurdles,” a senior Gland Pharma executive said.
As per some sources close to the Finance Ministry, this move was taken after the repeated aggression by China in the Doklam pass and with a motive to prevent excessive Chinese investment in India.
- Bomb found aboard Akhal Thakt Express, IM/LeT gives “warning” to Indian Army? - August 10, 2017
- Constructing dams on Indus tributaries is India’s right, says World Bank - August 5, 2017
- Mother of DK Shivakumar alleges that Congress is behind the IT raids on the K’taka Power Minister - August 4, 2017